Tired tariffs and sleepy sanctions

Jerome Teelucksingh

THE DECISION of the US to impose tariffs on imported goods entering that country is an old strategy. A similar foreign policy had been utilised as early as 432 BC by the Athenian Empire, which levied economic sanctions on Megara.

During the 17th and 18th centuries, one economic policy regularly employed was mercantilism. It was specially crafted to ensure a nation's wealth increased through exports. France and Britain were among the European nations with mercantilist policies. However, mercantilism existed in theory but not in practice. The reason being there was illegal trade and the presence of pirates and privateers who ignored these protectionist policies.

The embargo was another mercantilist regulation that was based on exclusion.

Some would be familiar with the infamous embargo that the US imposed on Cuba. The embargo was enforced in March 1958 during the rule of Fulgencio Batista. And it continued when Fidel Castro became the leader of Cuba. Not surprisingly, Castro blamed the embargo, and not communism, for his country’s economic problems. The use of this embargo is an unjust form of punishment in which innocent citizens suffer.

Additionally, the US sanctions against Russia is similar to the earlier Continental System (also known as Continental Blockade) which France enforced against England from 1806 to 1814.

Armand Lefebvre contended that for Napoleon Bonaparte, the ruler of France, everything was dominated by the struggle against England. This was particularly accurate when the creation of the Continental System is considered.

Pieter Geyl in Napoleon: For and Against argued that the French foreign policy was "an exaggerated" and "untenable one." Geyl is partly accurate because the Continental System had far-reaching goals.

Napoleon had created a "prison" in which he deliberately sought to block European nations from trading with Britain. He wanted to destroy the British economy and attempted to do so by ensuring British goods were restricted from entering Europe.

Napoleon’s efforts initially seemed successful. He was able to convince nations as Russia, Austria, and Prussia to co-operate and close their ports to British goods. However, curtailing part of the European trade did not cripple the British economy.

Amidst this turmoil, president Thomas Jefferson and the US Congress passed the Embargo Act in 1807 which stopped nearly all American exports to foreign countries and restricted imports from Britain. This act was an attempt to get Britain and France to recognise the neutrality of the US and to respect its maritime rights. Unfortunately, the act adversely affected the US economy.

One of the major reasons for the failure of the Continental System was because Britain had overseas colonies (in the Caribbean, Africa and Asia) and thus was not solely dependent on European trade.

Secondly, the arrogant Napoleon also failed to implement an alternative plan when Britain began contracting out its shipments to neutral vessels. Napoleon and his other European nations did not expect Britain to retaliate by creating a blockade of all European ships.

Donald Trump should be aware that the attempt by Napoleon to dictate the trading partners of European nations could not be sustained because in the 19th century Europe was part of a global interconnected trading network. Indeed, the British blockade severely handicapped internal European trading, which needed sea-shipping to operate at full capacity. Thus, any long-term boycott of trade with Britain would have hurt the European countries. This flaw in foreign policy badly damaged Napoleon’s leadership ability and his reputation of invincibility. Would this also be the fate of Trump?

In the 19th century, European nations were not prepared to take orders from a rapidly expanding France with Napoleon at the helm. The main reason for the failure of the Continental System was the desire of European countries to seek autonomy and be in control of their economies. This could also occur in 2025 in Europe and result in a backlash with the US tariffs.

European nations, during the failed blockade, realised that France and not Britain was the greater threat to Europe. Subsequently, Europe would unite against Napoleon.

Those who try to enforce any embargo, tariffs and sanctions seem like a tired economics teacher seeking to convince sleepy students that these are foolproof policies. Caribbean and Latin American countries must be more vocal in resisting the global economic order in which developed countries continue to dominate trade. These vulnerable, developing countries are given token roles, a voice but no power, and deceived into believing they will benefit.

For the Caribbean, there seems to be very few positive aspects of tariffs, sanctions, embargoes and globalisation.